Property taxes are an important part of owning a home. Buyers should also learn about property taxes when purchasing property. Knowing how the county calculates taxes and where your money goes can help you plan better and avoid surprises. This guide will help you understand property taxes in Riverside County and how to manage them.
The Basics of Property Taxes in Riverside County
How Property Taxes Work in Riverside County
Riverside County sets property taxes at 1.25% of the property's assessed value. The assessed value starts at the purchase price, and then the assessor uses inflation to guide future assessments. However, California has a 2% cap on annual increases to assessed value.
If you buy a home for $500,000, your property tax would be approximately $6,250. However, this base rate doesn't include supplemental taxes, special assessments, and other fees that may apply. ​Owners also need to account for future increases to the assessed value.
Supplemental Taxes, Special Assessments, and Mello-Roos
In California, when a property is sold or newly built, it must have a new assessment. The reassessment can lead to supplemental taxes. This tax charge covers the difference between the old and new assessed value. These supplemental taxes are billed separately from your regular tax bill.
Riverside County offers a tool called the Supplemental Tax Estimator. It helps you calculate extra taxes after buying a property. This tool applies only to changes in ownership, not new construction.
Your tax bill may include supplemental taxes and special assessments. Special assessments are fees from local, county, or state governments for public services. It could cover schools, policing, fire departments, parks, etc. For instance, Proposition 13 is a state property tax that funds public education.
When buying a property in a new development, be aware of Mello-Roos. This special tax helps fund local improvements like roads and schools. It gets added to your property tax bill and mainly affects newer areas. These taxes can raise your overall costs, so ask about them before buying. Special Assessment Districts help pay for local improvements like water distribution systems and sewer services. These districts charge property owners in specific areas to cover the costs of these public services.
Payment Deadlines
Property taxes in Riverside County are due in two installments:
- First Installment: Due by December 10th.​
- Second Installment: Due by April 10th.
If the 10th is a weekend or holiday, pay by the next business day to avoid late fees. A pre-due date postmark is acceptable.
Lease Land vs. Fee Simple Land
In Palm Springs, you'll encounter properties on both lease land and fee simple land. Understanding the difference is crucial, affecting property taxes and ownership rights.​
- Fee Simple Land: This is the most common form of property ownership, where you own the land and its structures.​
- Lease Land: Leasing land means you own the buildings but rent the land, often from a Native American tribe. That can save you 15% to 30% on costs and lower property taxes since you pay only on the building's value.
Before buying property on leased land, carefully review the contracts and lease terms. Consult advisors to ensure you understand everything.
Factors Influencing Property Taxes
Several factors can influence the total amount you owe in property taxes:
- Property Type and Size: Larger homes or properties with unique features may have higher assessed values.​
- Purchase Price: The price you pay for the property sets the baseline for its assessed value.​
- Personal Circumstances: Your age, veteran status, and whether the property is your primary or secondary residence can impact your tax obligations.
Planning Ahead
To manage your property taxes effectively:
- Budget Accordingly: Factor in the base tax rate, potential supplemental taxes, and special assessments when planning your finances.​
- Utilize Available Tools: Use resources like the Supplemental Tax Estimator to anticipate additional costs.​
- Seek Professional Advice: Consult with tax professionals or legal advisors to understand how your circumstances may affect your property taxes.
Are you looking for a home in Riverside County? Contact Geoffrey Moore, your trusted local Realtor®. He is familiar with local property taxes and the real estate market. Geoffrey will help you every step of the way, ensuring you feel informed and confident in your decisions.
Posted by Jim Cronin on
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